Solve planning challenges by reducing Work in Progress (WIP)

By Pascal Pollet – Sirris, Belgium

WIP, or Work in Progress/Process, refers to all unfinished goods at various stages of production, somewhere between raw materials and finished products. WIP is a critical concept in manufacturing: better insights into WIP lead to smoother planning and production processes.

In the first article of this three-part series, we debunked common myths about production planning. In this second article, we dive deeper into the benefits of reducing WIP. The third part will explain how to minimise WIP.

Why high WIP slows down production and increases costs

When Work in Progress (WIP) levels are high, production lead times rise sharply. Orders spend much of their time waiting for the next available workstation rather than being actively processed. This relationship is neatly captured by Little’s Law: The more WIP in the system, the longer the lead time.

As WIP grows, lead times not only lengthen but also become increasingly unpredictable. High WIP introduces variability and makes it difficult for planners to forecast completion dates accurately.

In an attempt to meet deadlines, planners often respond by releasing orders earlier, hoping this will keep production flowing. Unfortunately, this approach only makes the problem worse — it further increases WIP, leading to congestion, confusion, and longer delays.

Excessive WIP also causes hidden waste. It clutters work areas, consumes valuable space, and forces operators to spend more time searching for materials or walking between workstations. These inefficiencies reduce effective capacity and slow down deliveries.

In fact, companies that cut WIP by as much as 80% often achieve productivity gains of around 20%, simply by streamlining flow and reducing waiting time.

Beyond efficiency, high WIP also ties up working capital. Materials and labour must be paid for long before finished goods are shipped and invoiced. Lowering WIP frees up cash that can be reinvested — for example, in equipment upgrades, process improvements, or new product development.

The benefits of reducing Work in Progress (WIP)

Reducing WIP yields a wide range of benefits — from faster throughput and better delivery performance to improved financial flexibility.

1. Faster completion of urgent orders

With fewer orders circulating, operators are less likely to “cherry-pick” tasks. Priority orders move through the system more quickly and predictably.

2. Bottlenecks become visible

When WIP is reduced, some workstations may appear idle at first — but this is a good thing. Idle time helps reveal true bottlenecks, enabling targeted action to balance capacity. Over time, this improves overall output and shortens delivery times.

3. Shorter and more stable lead times

Lower WIP makes the production process simpler and more predictable. Instead of a complex, opaque “black box,” lead times become transparent and consistent.

4. Improved material availability

Later order releases give suppliers more time to deliver materials. This reduces shortages and the need for last-minute rescheduling.

5. Greater flexibility for changes

Orders that haven’t yet been released are easier to modify. Adjustments to specifications or priorities can be made without disrupting production.

6. Reduced risk of damage or obsolescence

With fewer items in progress, there’s less risk of defects, damage, or outdated products. Rework decreases, lead times shrink, and deliveries become more reliable.

7. Simpler capacity planning

Shorter, more predictable lead times eliminate the need for complex “lead-time offsetting.” Planners can focus on managing real constraints rather than juggling artificial buffers.